The National Association of Software and Services Companies (Nasscom) launched a report titled ‘Future of Technology Services – Winning in this decade’ which states that India’s technology services industry could accelerate growth by 2-4% over the next five years, reaching $300-350 billion.
The report illuminates the growth observed by the IT services sector and to provide insights into how to create impact and sustain growth in an ever-changing marketplace. Independent third-party research and analysis was conducted by McKinsey & Company as Knowledge Partners.
The report highlights the fact India’s technology services industry could accelerate growth if it can win in the cloud, AI, cybersecurity, and other emerging technologies. This will require closer collaboration among stakeholders across the private sector, academia, and the government.
50 Digital initiative
Fueling over 50 digital initiatives across sectors like banking and finance, healthcare, governance, etc., the technology services industry continues to be a prime driver of India’s digital dream with a contribution of 8% to the overall economy.
With the ongoing pandemic and the pace at which almost every sector has accelerated their digital transformation journeys, the increasing cloud consumption and other digital services like Artificial Learning (AI) and Machine Learning (ML) are making way for the digital and cloud services, with an opportunity to reach $600 billion to 700 billion by 2025. Coupled with cybersecurity and IoT digital spending, the technology services are expected to reach $300 billion to $350 billion in revenue by 2025.
Expressing confidence in the Indian IT sector, Nasscom President Debjani Ghosh said the IT services sector in the country can utilise the potential of deep technologies like cloud, artificial intelligence, machine learning, IoT, etc., through effective transformational practices, thereby contributing to the overall economy in the coming decade.
“The government needs to encourage and support digital literacy and skilling to ensure its talent, energy, imagination, knowledge, and unmatched commitment unites to address the customers’ surging needs. It is equally vital for India to reach a new level of cooperation to continue the remarkable growth observed in the sector,” said Debjani Ghosh.
At Nasscom, Debjani Ghosh said the organisation looks forward to helping bring people, companies, the government, universities, investors, and customers together to drive innovations that we cannot imagine today—and that will make the nation and the world better, safer, cleaner, more prosperous places.
The next decade will continue to witness growth in technology spend – primarily driven by the rise of technology natives and digital reinventors, new tech-enabled business models like ecosystems, direct-to-stakeholder channels and a rise in demand for Digital 2.0 accelerated by the industrialization of Cloud, AI and cybersecurity.
Competitive intensity is expected to rise further with hyper scalers, next-gen SaaS companies, players, and specialists competing for the tech. Services value pool. There is an ever-increasing need to differentiate amongst the providers in this space. As the competition intensifies, scale and specialization will be critical to succeed in the next decade of technology services.
Providers will need to refresh their service lines and offerings and stay relevant to cater to these more digitally adept enterprises, who expect higher-quality services and have very different buying behavior. Talent will also be a key differentiator, and the war for acquiring and retaining the next-gen talent will aggravate in the future.
To pursue these opportunities and contribute to the overall growth, there is a need for a complete shift in the operating model and concerted action from the industry and the government to reimagine enablers to sustain India’s position as the hub for digital services growth and reorganise the industry with business model innovation before the next big wave of disruption transforms the world again.